Brazil's Lojas Americanas misses profit estimates

Reuters Staff

2 Min Read

SAO PAULO, Nov 1 (Reuters) - Lojas Americanas SA, Brazil’s largest discount retailer, missed quarterly profit estimates on Wednesday, as revenue fell in the third quarter compared with the same period a year earlier.

In a securities filing, the company said net income was 23 million reais ($7 million), reversing a loss on the same period a year earlier, but sharply below a Thomson Reuters consensus estimate of 68 million reais.

Brazilian retailers have been struggling to expand sales as the country slowly emerges from its harshest recession on record. Revenue fell 3.2 percent from a year earlier to 3.8 billion reais on the third quarter.

Lojas Americanas has switched up store formats and inventory management in a bid to better compete with online competitors. In particular, the company has focused on buying up in-demand products and displaying them prominently while also opening smaller, convenience-style branches.

Earnings before debt, interest, taxation, or amortization (EBITDA) rose 6 percent from a year earlier to 630 million reais, above an average forecast for 572 million reais, as Lojas Americanas reduced costs faster than the revenue fell.

The company’s e-commerce unit, B2W Companhia Digital , has responded to increased competition in the Brazilian market from companies such as Amazon.com Inc, by transitioning to a marketplace format, in which the company sells merchandise from third-party sources. ($1 = 3.2673 reais) (Reporting by Tatiana Bautzer and Gram Slattery; Editing by Chris Reese)